Going, Going, Gone: Who Killed the Internet Auction?

Today, auctions are a smaller portion of e-commerce than they were in 2001, and even on eBay they are a dwindling, if still important, part of the business: They now account for just 31 percent of all sales on the site and are no longer at the heart of the company’s business model.

Dane Glasgow, vice president of global product management at eBay, said “eBay does not have a selling format of choice. We’re indifferent to format.” This creates, to be sure, something of a dilemma for the company, since customers very much associate it with auctions. But, as a corporation, eBay is now remarkably diversified, making money through its ticket reseller, StubHub; its bargain deals site, Half.com; and especially through PayPal, the preeminent online-payments system that last year posted a staggering $3.4 billion in revenue and is expected to do twice that by 2013. And on the eBay site itself, where tens of billions of dollars in goods change hands every year, the majority are sold through Buy It Now, a button that makes an eBay transaction similar to a purchase from Amazon.com or any other online store -- with a fixed price.